If you're struggling with debt, you may not be sure how to tackle it. One of the options is to pursue a Chapter 13 bankruptcy. A Chapter 13 bankruptcy is ideal for those who earn too much to file for a Chapter 7 bankruptcy or those who would not like to liquidate their assets.
With a Chapter 13 bankruptcy, you'll still make payments on your debts each month. The payments may be less than what you pay now. Creditors agree to the new terms and payments, and you make them to a single trustee for the next three to five years.
Once you complete the Chapter 13 bankruptcy timeline, the court may dismiss any debts that remain. This could help you dismiss a large number of debts depending on how much you owe. Additionally, you can generally keep everything you already possess instead of losing some assets like you would in a Chapter 7 bankruptcy.
Is bankruptcy the right option if you're working?
Chapter 13 bankruptcies are best for those who are working and can afford to make payments. People who are still working may not qualify for Chapter 7 bankruptcies, either, because of their income levels.
There are alternatives to bankruptcy, however, if you think that a bankruptcy isn't the right choice for you. For example, your attorney may advise you about different consolidation options or be able to negotiate with your creditors to lower payments, interest rates or fees and fines on your account.
Is it possible to pay back debts without bankruptcy?
For some people, yes, but for others, it would be extremely difficult. It's important to look into your accounts and how much money you owe as well as how much you earn. If you can pay for your obligations and make more than a minimum payment on at least one of your debts, you may be in a good position to pay off debt over time. However, if you struggle to make ends meet, it may be time to start looking into bankruptcy and how it can reduce your financial burdens.
When you talk to your Cleveland attorney, they'll help you understand your various options and how you can reduce your debts. You may find that there is a solution you were not aware of that can help you get back into control of your finances and on the path to financial wellness.